In this case mortgage originator Morgan Brooks Group Pty Ltd appointed Dominic Cincotta as its Double Bay agent. Cincotta stole $4million from a Dr Landa (of which only $1million was recovered). The fraudster arranged investment loans for Dr Landa and then pretended to be investing the proceeds with Perpetual into a fictional “offset mortgage account”.
Dr Landa sued Morgan Brookes Group Pty Ltd who were found liable on the grounds they armed Cincotta with apparent authority to represent Morgan Brookes Group Pty Ltd. The court noted that as well as having listed Cincotta as their representative on their website they also had on their website under the heading “Who we are” the following description: Morgan Brooks Group Pty Ltd DIRECT is a Wholesale Non Bank lending institution providing residential & commercial mortgage loans at competitive WHOLESALE rates. The Morgan Brooks Group Pty Ltd is an established Fund Manager within the Banking & Finance Industry; and is a full member of the Mortgage Industry Association of Australasia [MIAA], Australian Securitisation Forum and Commerce Queensland.”
This case highlights the need for mortgage originators and others who appoint agents to work under their colours to ensure they hold adequate fraud insurance.